Outcomes

 

At the end of the lecture, students would be able to:

1. State types of legal fees
2. Explain rules and principles guiding billing for professional services
3. Apply the rules and calculate professional fees (in leases, mortgages, and sale of land. Use Scale 3 for sale of land)
4. State the contents of a bill of charges
5. Explain the procedure for recovery of professional fees and when fees may be taxed
6. Draft Bill of Charges
7. Identify ethical issues arising from billing and accounts

 

Contents

1. Types of fees
2. Rules or principles guiding billing for professional services ( on property transaction)
3. Application of the rules and principles of professional billing/calculation of professional fees
4. Recovery of professional fees and taxation of fees
5. Drafting of Bill of Charges

 

BILL OF CHARGES

NOTE RULE 52 RPC 2007 – you can charge a reduced fee or free of charge on the grounds of close relationship, indigent

 Charge based on the nature of work to be done. The work a legal practitioner can be classified into three:

• Documentation: this is not every kind of documentation but documentation as it relates to land matters and this is governed by Legal Practitioners (remuneration for legal documentation and other land matters) order 1991. It provides for how a Legal Practitioner should charge when it comes to legal documentation in land matters.
• Contentious business – this refers mainly to litigation
• Non-contentious business: E.g. incorporation of a company, applying for GSM licence for a client

 

Mode of charging

• Time charging (hourly): for you to use hourly rates you must be disciplined and make the most effective use of your clients time, be strict with how you compute your time. Don’t spend it doing things not related to clients matter e.g. on social media.
• Payment on account: this is like a deposit. It helps the client to secure your services
• Quantum meruit* (Note when it applies) – this applies where a LP is unable to complete or conclude a clients instructions due to no fault of yours, they charge this based on the work done so far
• Appearance: this is majorly based on going to court, however it can also be charged when appearing before a panel.
• Contingent: this is based on if they are able to conclude/ win the case/ sell the property at a specific price/sell the property within a short period , then the fees will be determined by the client. Note: It can only be charged for civil matters

Note:

• Never give quotation: simply give them your complimentary card and fix and appointment
• Do not agree to a salary structure: this is different from a retainership

 

RETAINERSHIP – TYPES OF

• General: this is everything relating to a client would be handled by the LP e.g. the LP would handle both, because of this it means he can’t handle any matter against them so he cannot act for an employee that claims to have been wrongly dismissed by the company
• Special: they just have a retainer with the LP as to a particular area e.g. tax for a company - it means he can’t take a brief against the company from FIRS even if he has a retainer with FIRS. He can’t act on any matter that is contrary and forms the subject matter on the special retainer

Usually where there is a retainer there is an annual retainership fee

Note: the fact that you have been retained does not mean you should not charge for work done. * you may just charge a small fee in addition to the annual fee.

 

See Rule 48, 49, & 50 RPC

You shouldn’t share fees with a non – lawyer

 

SUING FOR FEES

Resorting to litigation should be the last option. The court of competent jurisdiction is the high court

Note s 16(1) LPA

Conditions precedent – s 16(2)

• A signed bill of charges containing particulars of principal items, must be presented – the bill of charges should be signed by the legal practitioner, if its on behalf of a firm it should be signed and the person should state their designation
• One month must expire – this must

See ABUBAKAR V MANULU (1998) 10 NWLR (PT 568) 41, OYEKANMI V NEPA (2000) 12 SCNJ 75

A LP cannot bring an action for breach of contract if the essence of that breach of contract is failure to pay charges/ recover professional fees even if there is an agreement. In order to recover professional fees,  a bill of charges must be used.

 

Content of a bill of charges

OYEKANMI V NEPA 2012

• Must be in writing
• Should contain all charges ,etc

 

TAXATION OF CHARGES

Definition – this is where a LP fees is subject to review by the high court , it is usually made by the client but it can also be made by the Legal Practitioner. It is only obtainable upon application and this application is made to the high court. It should be done before the expiration of one month because after one month the matter is ripe for litigation. It can be brought after one month with the permission of the court 

Matter need not be contentious         

 Note conditions precedent

 See SOBODU V DENLOYE (1998) 12 NWLR (PT 578)N 341

See s 17 and 19 LPA

 

COMPUTATION

LEGAL PRACTITIONERS’ (REMUNERATION FOR LEGAL DOCUMENTATION AND OTHER LAND MATTERS ORDER) 1991

• Deals with remuneration in respect of sale, purchase, mortgage , lease and other dealings in land

Divided into three scales

• SCALE I – SALES, PURCHASES AND MORTGAGES
• SCALE II – LEASES AND AGREEMENTS FOR LEASE AT RACK RENT
• SCALE III – BUSINESSES THAT ARE NOT CONTENTIOUS

You must give notice that you’re opting out of scale 1 and 2 and choosing scale III.

 For factors to consider under scale III, see pg 76 of RPC text book

 

Application of scale I

Calculation under the scale is done in four stages:

• FIRST 1,000
• SECOND AND THIRD 1,000 (2,000)
• FOURTH 1,000 TO 20,000 (17,000)
• REMAINDER WITHOUT LIMIT

 

For you to compute you need to go through 5 steps

1. Identify the transaction and choose the particular row

 

Example where consideration is N50,000

 Stage 1 – 1,0000

Stage 2 – (2^nd& 3^rd 1000) – 2,000

Stage 3 – (4^th 1000-2000) – 17,000

Stage 4 – (remainder without limit) 30,000

Total – 50,000

When doing your computation, don’t forget your decimals.

Note that a legal practitioner can elect to charge outside this order. See s.5 of 1991 order.

 

SCALE II

In a lease you would go through 4 steps :

1. Take care of N100 – N37.50
2. Take care of the second hundred up to N1000 – N25 for each N1000 up to N1,000
3. Then N12.50 in respect of every subsequent N100 or part thereof